Grant County business owners say they will be hurt by minimum wage increase

Patrons line up at the Silver City Food Co-op where 33 employees supply the community with local and organic groceries. Employee/manager Margarita Courney said the co-op already pays its employees more than the proposed state minimum wage of $8.50 and is in favor of the increase.

SILVER CITY — A proposed bill in the state Senate to raise the minimum wage in New Mexico could largely affect some business owners in Grant County.

Senate Bill 416 proposes to raise the minimum wage throughout the state from its current level at $7.50 an hour, already 25 cents above the federal minimum wage for untipped earnings, to $8.50 an hour. A recent change to the bill exempts employers with fewer than 11 employees.

Many businesses in Grant County are locally owned and number don't have 11 employees, but some, especially those in hospitality industries like restaurants and hotels, do, and owners say they will be negatively affected by the increase, if it's passed.

The bill has become controversial, especially with groups like the New Mexico Restaurant Association, which has sent out letters to its members asking them to contact their lawmakers to oppose the measure, according to one local restaurant owner.

"We've already sent letters to state legislators telling them we don't like it," said Michael Mesa, owner and manager of the Jalisco Cafe. "If an owner has to pay more, they're going to have to charge more without being able to improve what they give customers. People won't pay it."

The Jalisco Cafe has between 40 and 45 employees at any time, Mesa said, so they won't be exempt from the measure if it passes. Mesa said he was also concerned about filling positions.

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"It's going to hurt new hires who are just coming out of school without much experience," he said. "Those people might not be hired for so much."

Jim Nennich, who owns Wrangler's Bar and Grill with his wife Debbie under W & N Enterprises, also denounced the law.

"We're working in a free economy — minimum wage is a standard but I don't think its a living wage," he said. "It shouldn't be up to government to decide what people make, it should be up to them," he added. "It's up to our employees. We start people out at above the current minimum wage and then we offer extensive training opportunities employees can take. We also promote from within the company. So it really is up to them how much they want to make."

Nennich said he is also concerned about what this increase will do to small employers like himself in the current economy.

"The economy is in such a fragile state that we should hold off," he said. "There's a time for it, but that is not when the economy is already so stretched. What's the difference between making a little more an hour if employers have to cut your hours."

He also supports Gov. Susana Martinez's attempts to make New Mexico business-friendly and thinks raising the state's minimum wage higher than surrounding states isn't a wise way to do that.

Bo Reinhart, who owns several businesses in the Gateway Plaza in Hurley, including the Gateway restaurant, gas station, convenience store and motel, said a minimum wage increase is going to hurt his businesses.

"It's going to kill me," he said.

Reinhart has more than 11 employees between his businesses and said he pays most of them higher than minimum wage already, but some entry level positions, he said, like a dishwasher or a cashier, are not worth more than that.

"It's not that the people aren't worth that, it's that the position isn't," he said.

Reinhart said his concern is that if he has to increase the hourly wage of the seven or eight employees he has who are currently paid the minimum wage, then he will also have to increase the hourly wage of his other employees. The other employees may find it unfair that those few got an increase, he said, and may now be making the same as them, so they would expect an increase as well.

"I will either have to turn over employees and find some who will be willing to deal with less money, or increase my prices," he said.

That won't be fair to his customers, he said.

"There is not exactly enough profit in a restaurant to pay everyone a higher wage," he said. "I don't even pay myself that much money. I'm all for paying people more," he added. "Inflation has gone up. Things cost more. But when they increased the federal minimum in 2009, it took us awhile to absorb that. They are killing the small guy," he said of the government. "I don't want to live in a country that's going run us out of business. We don't have the pockets to soak this up."

Not all businesses with more than 11 employees are against the measure, however.

"We have 33 employees and already start them above the $8.50 mark," said Margarita Courney, a manager at the Silver City Food Co-op. "That being said, I think it's a great thing to support."

Others, though they employ more than 11 people collectively, have businesses organized in such a way that this law just wouldn't affect them if passed.

Paul Leetmae, owner of Lawley dealerships in Silver City said he has each dealership separated and neither employ more than 11 at this time. But his employees too are already paid more than the proposed increased amount.

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